Portland ECON 201 – Costs calculation

Portland ECON 201 – Costs calculation

Question
Ch.14 Costs calculation and Ch.16 Monopoly Graphing (6 points)
A. (3 points) This problem is matching learning objectives of chapter 14
sections14.2 and 14.3; also refer to ch.14 table 14.4. The table above has the total product schedule for an imaginary good called a
widget. Each unit of labor costs $25 and the fixed cost of capital is $100.
a. Use this information to complete the table. In the table, TFC is the total fixed
cost, TVC is the total variable cost, TC is the total cost, AFC is the average
fixed cost, AVC is the average variable cost, ATC is the average total cost,
and MC is the marginal cost.
B. (3 points) This problem is matching learning objectives of chapter 16
section 16.2 Single-Price Monopoly Output and Price Decision. Ron’s Hamburger Joint is the only restaurant in town. The above figure represents
Ron’s cost, the market demand, and marginal revenue curves. Ron operates as a
single-price monopoly.
a. How many hamburgers does Ron produce? Explain your answer.
b. What price does Ron charge for a hamburger? Explain your answer. 

c. What is Ron’s total revenue and total cost? Show your calculation work for c. and
d.
d. What is Ron’s economic profit?

Portland ECON 201 – Costs calculation


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